Spotrunner.Pdf
Total Page:16
File Type:pdf, Size:1020Kb
~ Case 2:09-cv-02487-PA-PLA Document 1 Filed 04/09/2009 Page 1 of 24 DAVIS & GILBERT LLP c: C) "" (" ... ,. PAUL F. CORCORAN (Pro hac vice application pending) I r-i r-, = I .:- ~:J =-- 2 PCorcoranúùdglaw.com i -.; :.;. ¡ r- .'-'d .. :: i " V 1740 Broad\vay i ( J ;,) :;u c,-i " 3 New York, NY 10019 ,'-'-, I I I ., Telephone: (212) 468-4800 i ~,..- \. ---; rii 4 Facsimile: (212) 468-4888 ,-,-, ¡ '-03: 0 : : (.;1 () --\ C) 5 VENABLE LLP ::;" '- BEN D. WHITWELL (CaL. Bar No. 138426) r- ~2 +w 6 bwhitwellúùvenable.com ~~j-l JEFFREYlV. TANZER (CaL. Bar No. 129437) 7 jtanzer~venable.com 2049 Century Park East, Suite 2100 8 Los Angeles, California 90067 Telephone: (310) 229-9900 9 Facsimile: (310) 229-9901 10 Attorneys for Plaintiff 11 or- ~ ~ g 12 UNITED STATES DISTRICT COURT ~ r-:i'I en ~~~o13 CENTRAL DISTRICT OF CALIFORNIA ~ ~ g ~ r:~~~~ ~ ;; ~ 14 ~ ci ~ ~ - f~. ',' 02 8 :: -' C" nAt "'~' Pú Z~LU-15 WPP LUXEMBOURG GAMMA ~.. c¡;MâRi;.: _~~ _ ;J t! ?\.l\'J, ~ ~ ~ ;; en ~ ~ 0 16 THRE SARL, on its own behalf and N -' derivatively on behalf of SPOT VERIFIED COMPLAINT FOR 17 RUNR, INC., SECURITIES FRAUD, VIOLATIONS 18 OF CALIFORNIA CORPORATIONS Plaintiff, CODE, BREACH OF FIDUCIARY 19 DUTY, CONSTRUCTIVE TRUST, v. 20 AND BREACH OF CONTRACT 21 SPOT RUNR INC., NICK GROUF, 22 DA VID WAXMAN, DANN RIMER, ROGER LEE, ROBERT PITTMAN, 23 PETER HUIE, BATTERY VENTURS 24 VI, L.P., BATTERY INVESTMENT PARTNRS VI, LLC, BATTERY 25 VENTURS VII, L.P., BATTERY 26 INVESTMENT PARTNERS VII, LLC, INDEX VENTURS III (JERSEY) L.P., 27 INDEX VENTURS III (DEL A WARE) 28 L.P., INDEX VENTURS III 234554/v.2 COMPLAINT Case 2:09-cv-02487-PA-PLA Document 1 Filed 04/09/2009 Page 2 of 24 1 PARALLEL ENTREPRENEUR FUN 2 (JERSEY) L.P., 3 Defendants. 4 5 Plaintiff WPP Luxembourg Gamma Three Sarl ("WPP" or "Plaintiff') on its own 6 behalf and derivatively on behalf of Spot Runner Inc. (the "Company" or "Spot 7 Runner") , by its attorneys, Davis & Gilbert LLP and Venable LLP, for its Complaint 8 against defendants Spot Runner Inc., Nick Grouf ("Grouf'), David Waxman 9 ("Waxman"), Danny Rimer ("Rimer"), Roger Lee ("Lee"), Robert Pittman ("Pittman") 10 (Grouf, Waxman, Rimer, Lee and Pittman together the "Directors"), Peter Huie 11 or- ("Huie"), Battery Ventures VI, L.P., Battery Investment Parters VI, LLC, Battery ~ ~ g 12 'I en ~ -t- q: _ Ventures VII, L.P., Battery Investment Partners VII, LLC (the Battery entities together ~~~oI3LU 0 0 ~ i£ci ~-' ~' "Battery"), Index Ventures III (Jersey) L.P., Index Ventures III (Delaware) L.P., Index r:~ q:~u_~ q: ~ 14 ~ ci ~ ~ :: -' C" Ventures III Parallel Entrepreneur Fund (Jersey) L.P. (the Index entities together Z ~ ~ - 15 ""rTi U LU q: Z "Index") (all defendants collectively, "Defendants" or "Insiders"), alleges as follows: ;; ~i3 16 N -' NATURE OF THE ACTION 17 1. WPP brings this action individually on its own behalf and also as a 18 derivative action within the meaning of Rule 23.1 of the Federal Rules of Civil 19 Procedure (the "Federal Rules") on behalf of Spot Runner to enforce the rights of the 20 Company. 21 2. With regard to the derivative claims, WPP has not made demand on the 22 Company for the actions requested in Complaint because demand would be futile. None 23 of the directors of the Company are disinterested and independent because all have 24 engaged in self-dealing in connection with this matter, as alleged below. 25 3. This action brings claims for violation of Section 1 O(b) of the Securities 26 Exchange Act of 1934 and Rule 10b-5 promulgated thereunder; violation of California 27 securities laws; breach of fiduciary duty to Spot Runner, and for the imposition of a 28 2 234554/v.2 COMPLAINT Case 2:09-cv-02487-PA-PLA Document 1 Filed 04/09/2009 Page 3 of 24 1 constructive trust on the proceeds of improper secondary sales of stock by the majority 2 stockholders; breach of fiduciary duty to WPP as minority stockholder; breach of the 3 Right of First Refusal and Co-Sale Agreement; breach of the Board Observer Rights 4 Agreement. 5 THE PARTIES 6 4. WPP is a Luxembourg corporation, which maintains its principal place of 7 business at Rue Heine, 6, L 1720 Luxembourg, Luxembourg. WPP is a subsidiary of 8 WPP P1c, a global communications agency, with partner companies specializing in all 9 areas of communications, including advertising, direct marketing, and public relations. 10 WPP P1c is the largest media buyer in the world. 1 1 5. Spot Runner is a Delaware corporation which maintains its principal place oor- (J 1 ~ N g 2 of 'I en business at 6300 Wilshire Boulevard, 21st Floor, Los Angeles, CA 90048. Spot ~ -t- q: _ ~ ~ ~ 0 13 LU 0 0 Runner is a start-up media buying corporation which was purportedly developing an ~ i£ci ~-' ~' ~.. q:ii q:U N~ 14 innovative internet platform to allow small businesses to purchase cable and broadcast ~"")- ci ~ -- ~ :: -' C" Z ~ ~ - 15 TV advertising services online. ""rTi U LU q: Z ;; ~N -'r3 16 6. Upon information and belief, defendant Nick Grouf is a resident of 17 California. Grouf is a founder of Spot Runner, its current Chief Executive Officer 18 (CEO), and Chairman of the Board of Directors. Groufwas CEO and Chairman of the 19 Board of Directors at all times relevant to this action. 20 7. Upon information and belief, defendant David Waxman is a resident of 21 California. Waxman is a founder of Spot Runner, its current Chief Technology Officer 22 its Board of (CTO), and a member of Directors. Waxman was a director of the 23 Company at all times relevant to this action. 24 8. Upon information and belief, defendant Danny Rimer is a resident of the 25 United Kingdom. Rimer is a member of Spot Runner's Board of Directors. Rimer was 26 a director of the Company at all times relevant to this action. 27 9. Upon information and belief, defendant Roger Lee is a resident of 28 California. Lee is a member of Spot Runner's Board of Directors. Lee was a director 3 234554/v.2 COMPLAINT Case 2:09-cv-02487-PA-PLA Document 1 Filed 04/09/2009 Page 4 of 24 1 of the Company at all times relevant to this action. 2 10. Upon information and belief, defendant Robert Pittman is a resident of 3 New York. Pittman is a member of Spot Runner's Board of Directors. Pittman was a 4 director of the Company at all times relevant to this action. 5 11. Upon information and belief, defendant Peter Huie is a resident of 6 California. Huie is General Counsel to Spot Runner. Huie was General Counsel to the 7 Company at all times relevant to this action. 8 12. Upon information and belief, defendant Battery Ventures VI, L.P. is a 9 limited partnership with its principal place of business at 2884 Sand Hil Road, Suite 10 101, Menlo Park, CA 94025. 1 1 13. Upon information and belief, defendant Battery Investment Partners VI, or- ~ ~ ~ 12 LLC, is a Delaware corporation with its principal place of business at 2884 Sand Hil .. i- ~ ~ ~ ~ g 13 Road, Suite 101, Menlo Park, CA 94025. ~ 't ~ ~ ; ~ ~ ~ 14 14. Upon information and belief, defendant Battery Ventures VII, L.P. is a ~ g¡' ~ ~ Z ~ g !2 15 partnership with its principal place of business at 2884 Sand Hil Road, Suite 101, ~ t5 ~ ;; ~ ~ 16 Menlo Park, CA 94025. 17 15. Upon information and belief, defendant Battery Investment Partners VII, 18, LLC is a Delaware corporation-with its principal place of business at 2884 Sand Hil 19 Road, Suite 101, Menlo Park, CA 94025. 20 16. Upon information and belief, defendant Index Ventures III (Jersey) L.P. is 21 a partnership with its principal place of business at No. 1 Seaton Place, St. Helier, 22 Jersey JE4 8Y J, Channel Islands, England. 23 17. Upon information and belief, defendant Index Ventures III (Delaware) L.P. 24 is a limited partnership with its principal place of business at its principal place of 25 business at NO.1 Seaton Place, St. Helier, Jersey JE4 8Y J, Channel Islands, England. 26 18. Upon information and belief, defendant Index Ventures III Parallel 27 Entrepreneur Fund (Jersey) L.P. is a limited partnership with its principal place of 28 business at NO.1 Seaton Place, St. Helier, Jersey JE4 8Y J, Channel Islands, England. 4 234554/v.2 COMPLAINT Case 2:09-cv-02487-PA-PLA Document 1 Filed 04/09/2009 Page 5 of 24 JURISDICTION AND VENUE 2 19. This Court has jurisdiction under the securities laws of the United States, 3 15 § U.S.C. 78aa, and under the Judicial Code of the United States, 28 U.S.C. § 1331. 4 This Court has supplemental jurfsdiction over WPP's state law claims under 28 U.S.C. 5 § 1367(a). 6 20. Venue is appropriate in the Central District of California under 28 U.S.C. 7 §§ 1391(b) and 1401 because a substantial part of the events and omissions giving rise 8 to the claims occurred there, and because the May 2007 Stock Purchase Agreement 9 fixes the federal or state courts of the County of Los Angeles, California as the venue 10 for lawsuits arising out of the Agreement, and under 15 U.S.C. § 78aa because some of 11 the defendants are found in and/or transact business in this District. or- ~ ~ g 12 21. This individual and derivative action is not a collusive one to confer ~ i-:i'I en the United States which it would not otherwise have.